James Pethokoukis on China trade reminds me of my doctor pushing statin drugs

As everyone knows, statin drugs for cholesterol inhibit CoQ10 synthesis. So now the doctors push a CoQ10 supplement on you at the same time they push the cholesterol drug.

As George W. Bush famously said, "That doesn't make any sense."

So along comes James Pethokoukis confronted with the study showing how the opening to China trade destroyed many American jobs and lives.

His solution?

An expanded earned income credit, wage subsidies, and other government safety net initiatives to encourage work over retirement.

And relocation assistance to where the jobs are.

Never mind we don't want to move to China, India, Pakistan, Thailand or Indonesia.

Like Keynesians and MDs pushing drugs libertarians can never be proven wrong.

Fox News didn't want Repubicans to discuss the economy and jobs last night because that didn't fit Fox News' agenda

Jim Tankersley noticed the glaring omission from last night's Republican debate, here:

Polls continue to show that Americans care more about the economy than any other election issue. Fox News moderators noted that they had received more than 3,000 economy-themed questions on Facebook before the debate. Which is why it's so baffling that neither the questioners nor most candidates seemed eager to talk about growth, jobs and - as Republicans have been promising to do all election cycle - America's beleaguered working class. ...

"Way too little discussion" of economic growth, the conservative commentator Larry Kudlow tweeted after the prime-time debate ended. "If you're one of the 65 percent of Americans who think the U.S. is on the wrong track," said James Pethokoukis, a conservative writer for the American Enterprise Institute who has pushed Republican candidates to address worker angst, "what have these debates offered?"

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Obviously the economy and jobs didn't fit Fox News' agenda last night, which was to destroy the candidacy of Donald Trump, who has pledged to end the flood of illegal immigration stealing Americans' jobs, end the farce of free-trade and become the greatest jobs president the country has ever seen.

Fox News, like The Wall Street Journal, is owned by the open borders, free-trade libertarian Rupert Murdoch. It has its marching orders. And every candidate who takes money from the libertarian Koch brothers has his and is similarly beholden to the same ideology which demands the cheapest labor possible in service of the almighty bottom line, not in service of the country's citizens. The involvement of Facebook and Debbie Washerwoman Schultz of the DNC were just the bow around the illegal alien amnesty package.  

And that's why Donald Trump scares the crap out of them and must be destroyed:

He doesn't need their money to run for president, and won't do their bidding when he wins.

Democrats broke nearly every promise about ObamaCare

Jack Kelly here:

Nearly every promise Democrats made has been broken. The average family pays more (some much more) for insurance, not $2,500 less. About 9 million Americans (so far) have learned they couldn’t keep the health plans they had if they wanted. Or some of their doctors.

Federal spending for health didn’t go down. It’s zoomed upward. So have emergency room visits. Overhead costs are exploding.

The Congressional Budget Office estimates that Obamacare will lower full-time employment by 2.3 million in 2021, compared with what might have been without reform.

The ACA has hurt millions more than it’s helped. The worst is yet to come. President Barack Obama delayed or altered (mostly illegally) unpopular provisions at least 50 times. If they’re implemented fully, up to 100 million who get insurance from their employers could have their policies canceled, the American Enterprise Institute has estimated.

Bushie AEI Joins Drumbeat To Raise Taxes On Middle Class

Here.

I'm pretty sure the author, Sita Nataraj Slavov, wasn't raised in Milwaukee, but you never know these days.

 

Link fixed.

The Dodd Bill Makes Moral Hazard Government Policy

An Opinion from The Washington Examiner

Run against Wall Street

By: Michael Barone

Senior Political Analyst

04/01/10

Senate Banking Committee Chairman Christopher Dodd, after spending some time negotiating with committee Republicans Bob Corker and Richard Shelby, has decided to advance major financial regulation legislation without bipartisan support. Democratic spin doctors will try to portray the fight over this legislation as a battle between Republicans favoring lax regulation of Wall Street and Democrats favoring tough regulation.

But is the Dodd bill really tough legislation, particularly in its treatment of the major financial entities? My American Enterprise Institute colleague Peter Wallison argues that it is not, because it gives Too Big To Fail status to the big entities—Citigroup and JPMorgan Chase, Goldman Sachs and Morgan Stanley. This is done by setting up a resolution process for a failing firm which protects creditors more than ordinary bankruptcy proceedings would. Wallison writes:

“From the perspective of its effect on the economy, it does not matter what happens to the company, or to its shareholders and management. The only thing that matters in a government resolution of a failing company is what happens to the creditors--because it's the creditors that will provide the funds preferentially and at favorable rates to large companies rather than small ones.

"In this respect, the Dodd bill does it again--it signals to creditors that they will get a better deal if they lend to the big regulated firms rather than their smaller competitors, and it does this by making it possible for creditors to be fully paid when a too-big-to-fail financial firm is liquidated, even though this would not happen in bankruptcy. There are a number of ways that this can be done, including through a simple merger with a healthy firm. As a prescription for moral hazard, this can hardly be surpassed. The creditors will line up to provide cheap money to the too-big-to-fail firms the Fed will be regulating.”

Wallison is not alone in taking this view. Clive Crook, writing in National Journal seems to agree:

“You do not deal with ‘too big to fail’ by keeping a list of systemically significant institutions: By itself, that makes things worse. You do not deal with it by promising to let most failing financial firms, including those on your list, go bankrupt: Nobody will believe that promise. You deal with it by combining early FDIC-like resolution for all financial firms, banks and nonbanks alike, with stricter and smarter requirements on their capital, liquidity, and leverage.”

Libertarian economist Arnold Kling suggests an even tougher approach, though he doesn’t say how to put it into effect: break up the big banks.

I think as a matter of both policy and politics, Republicans ought to oppose the Dodd bill’s provisions that effectively grant Too Big To Fail status to a handful of financial institutions (and perhaps to other companies, Wallison has argued). They should oppose giving preferred status to the very largest firms as compared to smaller competitors. They should be prepared to argue that the Democratic bill gives vast advantages to firms whose employees have gotten huge compensation (and who, as it happens, tend to give more money to Democrats than Republicans). The cry should be, no favor to the big Wall Street fat cats. Mainstream media is unlikely to transmit this message but, as we have seen in the health care debate, messages can get through without them.

ObamaCare Will Increase Deficits By Over $500 Billion in First Decade

Sorry. Just correcting the lies.

The article was posted here:

March 25, 2010

Bond Markets Reflect the True Cost of Obamacare

By Michael Barone

Not many people noticed amid the Democrats' struggle to jam their health care bill through the House, but in recent weeks U.S. Treasury bonds have lost their status as the world's safest investment.

The numbers are pretty clear. In February, Bloomberg News reports, Berkshire Hathaway sold two-year bonds with an interest rate lower than that on two-year Treasuries. A company run by a 79-year-old investor is a better credit risk, the markets are telling us, than the U.S. government.

Buffett's firm isn't the only one. Procter & Gamble, Johnson & Johnson and Lowe's have been borrowing money at cheaper rates than Uncle Sam.

Democrats wary of voting for the health care bill may have been soothed by the Congressional Budget Office's report that it would reduce federal deficits over the next 10 years. But bond buyers know that the Democrats gamed the CBO system to get a good score.

The realities, as former CBO Director Douglas Holtz-Eakin pointed out in The New York Times, are different. The real cost is disguised by the fact that the bill includes 10 years of revenue but only six years of spending. It includes $70 billion in premiums for long-term care that will have to be paid out later. It excludes $114 billion in discretionary spending needed to run the program. It includes nearly half a trillion dollars in unrealistic Medicare savings.

Holtz-Eakins's bottom line: The bill will not lower deficits, but will raise them by $562 billion over 10 years. Treasury will have to borrow that money -- and probably pay much higher interest than it's paying now.

Moreover, once the bill is fully in effect, the Cato Institute's Alan Reynolds points out, its expenses are likely to grow at least 7 percent a year -- significantly faster than revenues. At that rate, spending doubles every 10 years.

No wonder that Moody's declared last week that the Treasury is "substantially" closer to losing its AAA bond rating.

It's not only the federal government that is heading toward insolvency. State governments will have to spend more under the health care bill -- $735 million in Tennessee alone, according to Democratic Gov. Phil Bredesen.

And state governments are already facing a huge problem called pensions. The Pew Charitable Trusts estimates that state government pensions are underfunded by $450 billion. My American Enterprise Institute colleague Andrew Biggs argues in The Wall Street Journal that the real figure is over $3 trillion.

The reason: State governments set aside cash to invest in pensions, but they typically assume that their investments will rise 8 percent a year indefinitely. They haven't been getting such high returns and are not likely to do so in the future. But they are under legal obligations, which courts won't allow them to escape, to pay the pensions. Retirees get paid off before bondholders, which means that states are going to have to pay more interest when they borrow.

Back in the 1990s, Clinton adviser James Carville said that if he was reincarnated he would like to come back as the bond market -- "because you can intimidate everybody." Governments, like all organizations, need to borrow routinely. But investors won't lend unless they think they will be paid back. And they will demand higher interest rates as their loans become riskier.

On Sunday, 219 House Democrats, soothed by their leaders' gaming of the CBO scoring process, voted in reckless disregard of what the bond market has been telling them. Some may share Speaker Nancy Pelosi's optimism that the government's looming fiscal disaster can be avoided by imposing a value-added tax -- in effect, a national sales tax.

But, as we know from the experience of high-tax Western Europe and relatively low-tax America over the last three decades, higher taxes tend to retard economic growth. Lower economic growth means less revenue for government than in CBO projections. Less revenue means more borrowing -- and at some point lenders are going to call a halt.

Barack Obama's project of transforming the United States into something like Western Europe is, according to the CBO, raising the national debt burden on the economy to World War II levels. I see train wrecks ahead -- as the bond market forces huge spending cuts or tax increases first on states and then on the federal government. It will make what happened in the House Sunday look pretty.

You Can't Opt Out, You Can't Buy Cheap, And Healthcare Will Be Rationed

The following was posted here:

March 25, 2010

The Reality of Obamacare

By Jonah Goldberg

First: Congratulations to President Obama and the Democratic leadership. You won dirty against bipartisan opposition from both Congress and the majority of Americans. You've definitely polarized the country even more, and quite possibly bankrupted us, too. But hey, you won. Bubbly for everyone.

Simply, you have nationalized health care by proxy. Insurance companies are now heavily regulated government contractors. Way to get big business out of Washington and our lives! These giant corporations will clear a small, government-approved profit on top of their government-approved fees. Then, when health-care costs rise - and they will - Democrats will insist, yet again, that the profit motive is to blame, and out from this Obamacare Trojan horse will pour another army of liberals demanding a more honest version of single-payer.

The Obama administration has turned the insurance industry into the Blackwater of socialized medicine.

That's what Obama always had in mind. During the now-legendary health-care summit, Obama, who loves to talk about "risk pools," "competition," "consumer choice," and the like, let it slip that he actually doesn't believe in insurance as commonly understood. The notion that Americans should buy the health-care "equivalent of Acme Insurance that I had for my car" seemed preposterous to him. "I'm buying that to protect me from some catastrophic situation," he explained. "Otherwise, I'm just paying out of pocket. I don't go to the doctor. I don't get preventive care. There are a whole bunch of things I just do without. But if I get hit by a truck, maybe I don't go bankrupt." Apparently, people are just too stupid to go to the doctor - or maintain their homes - if they have to pay much of anything out of pocket.

The endgame was to get the young and healthy to buy more expensive insurance than they need or want. "Expanding the risk pool" and "spreading out the risk" by mandating - i.e., forcing - young people to buy insurance is just market-based spin for socialist ends. A risk pool is an actuarial device where a lot of people pay a small sum to cover themselves against a "rainy day" problem that will affect only a few people. Such "peace of mind" health insurance is gone. What we have now is health assurance. With health assurance, there are no "risk pools" really, only payment plans.

Under the new law, all the exits from the system are blocked. You can't opt out or buy cheap, high-deductible Acme car-type insurance, even if that's what you need. Ultimately, even that coercion won't be enough to make the whole thing work, because the "cost curve" will not be bending.

Profit-hungry insurance companies were never the problem. (According to American Enterprise Institute economist Andrew Biggs, industry profit margins are around 3 percent, and the entire industry recorded profits of just $13 billion last year, close to a rounding error in Medicare fraud estimates.) Rather, health-care costs have been skyrocketing because consumers treat health insurance like an expense account. Putting almost everyone into one "risk pool" doesn't change that dynamic; it universalizes it. And eventually, the only way to cut costs will be to ration care.

In September, Obama got into a semantic argument with ABC's George Stephanopoulos, who noted that requiring all Americans to pay premiums for a government-guaranteed service sounds an awful lot like a tax. "No. That's not true, George," Obama said. "For us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase. What it's saying is . . . that we're not going to have other people carrying your burdens for you."

Stephanopoulos invoked a dictionary definition of a tax: "a charge, usually of money, imposed by authority on persons or property for public purposes." Obama laughed off the idea that a dictionary might outrank him as the final arbiter of a word's meaning: "George, the fact that you looked up . . . the definition of tax increase indicates to me that you're stretching a little bit right now. Otherwise, you wouldn't have gone to the dictionary to check on the definition."

Okay, put aside your dictionaries. The legislation allocates $10 billion to pay for 16,500 IRS agents who will collect and enforce mandatory "premiums." Does that sound like the private sector at work to you?